Irrlicht's development began in 2003 with only one developer, Nikolaus Gebhardt.[17] Only after the 1.0 release of Irrlicht in 2006 did the team grow to currently ten members, most of them being developers.[18]

Irrlicht supports many file formats. It will load and display 3ds Max files, Quake 2 MD2 Models, Wavefront .obj objects, Quake 3 .bsp maps, Milkshape3D objects, and DirectX .x files.[19] Additional format loaders have been written as external plugins. Lights, cameras and 3D objects are managed as a tree of 'Scene Nodes', arbitrary groupable entities linked together in a scene graph. These nodes are responsible for their own behaviour, but can also be managed by animators, each other, or manually by the user.

A large number of built-in node types exist and can be used together to make complex indoor and outdoor scenes. New nodes are trivial to make and can be added at runtime; many additional node types are available from the community. Node types packaged with Irrlicht include a terrain renderer and sky domes/boxes for outdoor rendering, BSPs for indoor rendering, bone based animated meshes, stencil shadows, billboards and particle systems, water surfaces and primitives.

A skinnable 2D GUI is available, supporting many controls and the ability for users to plug in their own (or community made) custom widgets at runtime. Irrlicht's internal event system provides mouse, keyboard, joystick and GUI events without having to rely on additional libraries.[20]

Filesystem access is abstracted allowing platform-independent file and folder access, and transparent access to files within ZIP archives. Other I/O features include an XML reader and writer, the ability to take screenshots, manipulate images and meshes and then save them in several different file formats.

Irrlicht's provides support for simple collision detection including mouse picking, but users are advised that this is not intended as a replacement for a full featured physics engine.

Irrlicht was designed to be able to load and save the current scene to an XML file; this combined with the engine's open-source licensing model has attracted various programmers and developers to create world editors for Irrlicht to simplify the world-creation process. One such example is the irrEdit world editor, developed by Nikolaus Gebhardt and other members of the company Ambiera.[21] IrrEdit contains a radiositylightmap generator and a scripting interface using Squirrel scripts.

Since Irrlicht does not support sound by itself, Ambiera has also developed irrKlang, a non-free, proprietary audio library with an API similar to Irrlicht.[22] Being developed by the same group, irrEdit supports the use of sounds in levels made by irrEdit for use with irrKlang-enabled compiled DLLs. Also among Ambiera's creations is irrXML, Irrlicht's XML parser.

More extensions can be found in the Irrlicht forums and in the irrExt project, a side-project of Irrlicht for special purpose add-ons.

There are also some new technologies in forums such as Deferred shading or Shadow mapping. Many users contribute extensions such as Compute Shaders (OpenGL 4.3) and Tessellation Shaders (Shader Model 5.0).